SUNNY ITALY WANTS SUBSIDY FOR SOLAR R & D

Watching European nations work out the details of how to incentivize renewable energy is a great opportunity to learn.

Italy: support for solar grows
David Hiller, 23 July 2007 (Energy Business Review)

WHO
The Italian government, The EU Commission
EU solar potential: Italy is in the hot zone. (click to enlarge)

WHAT
Though it produces 14% of its electricity from renewables, Italy is not on track to meet its 2010 goals for renewable production and therefore wants to create a subsidy for solar R & D but this may run afoul of the EU Commission’s rules for what a member nation may do to stimulate renewables growth.

WHEN
The R & D subsidy would be included in Italy’s 2008 budget if it is approved. Italy believes the move would allow it to generate 3000 megawatts of solar energy by 2016.

WHERE
- The subsidy would apply in Italy and the government hopes it would do for Italian solar what “feed-in tariffs” have done for renewables in Germany and Spain.
- The EU Commission is in Brussels.

WHY
- “Feed-in tariffs” are entirely allowable by EU Commission rules but the proposed Italian subsidy may not be. “Feed-in tariffs” pay anybody who puts electricity into the grid via renewable installations. That is different from having the state fund “start-ups.”
- Italy’s “green obligation certificates” are similar to “fedd-in tariff” in that they pay a specific price for each kilowatt-hour of renewable energy produced but this has not created enough incentives to entrepreneurs to meet the 2010 goal.
- EU Commission rules specifically exempt R&D subsides except in the case of pure research.
The Vatican recently announced they would install solar panels. (click to enlarge)

QUOTES
Article: “The question is whether this direct subsidy of the production of solar panels will fall foul of the EU competition commission. While guaranteed returns for investors via feed-in tariffs have been successful in raising renewable capacity in both Spain and Germany, it is highly questionable whether direct production subsidies would not be seen as a distortion of the marketplace.”